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White House Signals Shift Away from Public Plan

August 17, 2009 at 12:00 AM EDT
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After weeks of criticism at town halls across the nation, the Obama administration signaled on Sunday it is open to dropping a public insurance option from any health care legislation. Despite likely backlash from liberals, the administration now appears focused on developing a co-op model to help control the cost of care.
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PROTESTORS: Down with government health care!

GWEN IFILL: With polls dropping and protests rising, the Obama administration appears willing to compromise on a key aspect of its health reform proposal, the so-called public option.

The government-backed plan, similar to Medicare, would allow consumers to choose something other than private insurance. The competition, backers say, would keep costs lower.

But key members of Congress argue it would put private insurers at a disadvantage.

JOHN KING, CNN anchor: Even some of his allies say they are more and more skeptical…

GWEN IFILL: Yesterday, Health and Human Services Secretary Kathleen Sebelius softened her language about the need for a public option.

KATHLEEN SEBELIUS, Secretary of Health and Human Services: I think what’s important is choice and competition. And I’m convinced at the end of the day the plan will have both of those, but that is not the essential element.

U.S. PRESIDENT BARACK OBAMA: That would give the option, the option…

GWEN IFILL: And at a Colorado town hall meeting on Saturday, President Obama said the lack of a public option, which he has supported, might not be a deal-breaker.

BARACK OBAMA: This is a legitimate debate to have. All I’m saying is, though, that the public option, whether we have it or we don’t have it, is not the entirety of health care reform. This is just one sliver of it.

GWEN IFILL: The political reality was most directly summed up Sunday by Democratic Senator Kent Conrad of North Dakota.

SEN. KENT CONRAD, D-N.D.: The fact of the matter is, there are not the votes in the United States Senate for the public option. There never have been. So to continue to chase that rabbit, I think, is just a wasted effort.

GWEN IFILL: Conrad is instead trying to assemble support for another alternative, nonprofit health care cooperatives.

SEN. KENT CONRAD: Co-ops are very prevalent in our society. They’ve been a very successful business model. Of course, we have hundreds of them here in my home state of North Dakota. We have rural electric cooperatives in 47 states. Land O’ Lakes is a cooperative. Ace Hardware is a cooperative. The Associated Press is a cooperative.

We have successful cooperatives in health care. Group Health in Seattle has 600,000 people, and it’s the most highly rated plan in the state of Washington.

So this is a model that works. It’s not government-run and government-controlled. It’s membership-run and membership-controlled. But it does provide a nonprofit competitor for the for-profit insurance companies, and that’s why it has appeal on both sides. It’s the only plan that has bipartisan support.

GWEN IFILL: Under the plan, the government would provide start-up funding to doctors, hospitals and businesses to create co-ops, which could eventually negotiate for lower rates.

But liberals who support the public option say co-ops will never work. Former Democratic Party Chairman Howard Dean, a physician, spoke on CBS’s “The Early Show” this morning.

HOWARD DEAN, former chairman, Democratic National Committee: The trouble is, you can’t really have reform without a public option. My guess is the Republicans aren’t going to vote for this bill no matter what, so there’s no point in making a whole lot of concessions to people who aren’t going to vote for the bill under any circumstances anyway.

GWEN IFILL: Some conservatives who oppose a public plan say they are willing to at least consider co-ops. Republican Richard Shelby of Alabama.

SEN. RICHARD SHELBY, R-Ala.: But it would be a — I believe a step in the right direction away from a government takeover of our health care in this country. I don’t know if it will do everything people want, but we ought to look at it. I think it’s a far cry from the original proposals.

GWEN IFILL: House and Senate negotiators are hoping to achieve middle ground next month.